President William Ruto has ordered a review of laws governing insurance companies and auctioneers following growing complaints from matatu operators over unpaid claims and vehicle seizures.
The President said many transport operators are suffering despite paying for insurance cover, only for passengers and vehicle owners to be left carrying the burden after accidents happen.
“There is a big issue with transport operators who, despite having insurance cover for their vehicles, find that their passengers end up paying the bills when incidents occur, while the insurance companies go free,” Ruto said.
“This is a concern we must address so that an insurance cover means something,” he added.
The review will focus on the Insurance Act and the Auctioneers Act, which guide how insurance firms and debt collectors operate in the country.
Ruto directed the Ministry of Transport to work together with the Insurance Regulatory Authority (IRA) to deal with long-standing complaints from matatu owners and other operators in the transport sector.
Part of the changes will look into how insurance claims are handled, especially delays that have frustrated many motorists for years.
The government also wants stricter action against rogue auctioneers accused of unfairly repossessing vehicles from operators who are struggling with loans or insurance-related disputes.
Officials say loopholes in the current laws have left many business people exposed, with some losing their vehicles quickly through repossession even before disputes are settled.
According to petitions presented in Parliament, more than 4,000 public service vehicles in the Lower Eastern region alone have been tied up in court cases after insurance firms allegedly failed to honour claims or provide legal support.
Delayed compensation remains one of the biggest complaints against insurance companies in Kenya.
At the same time, insurers say fake accident claims and fraud continue to hurt the industry. The Association of Kenya Insurers says some cartels work with fake passengers and exaggerated injuries to make false claims.
The association estimates that insurance fraud costs companies more than Ksh3.2 billion every year.
The planned review now aims to balance the interests of transport operators, passengers and insurance companies while protecting businesses from unfair treatment.
